It is a sudden recovery, but welcome for X, owned by Elon Musk. According to information from the newspaper Financial TimesThe Boursan Valuation of X, former Twitter, has skyrocketed for a few weeks. The social network is now even estimated at $ 44 billion by investors, the amount paid by Elon Musk to acquire it in 2022.
At the end of September, information published by the Fidelity Investments asset management fund suggested that the valuation of the company was less than $ 10 billion, a drop of almost 71 %. And for good reason: since its takeover of the group, Elon Musk has relaxed the platform moderation policies, which has pushed many advertisers to leave, including Coca-Cola or Apple in 2023. So, how to explain this return in force?
Cost reduction and Donald Trump
According to several observers, the appointment of Elon Musk in Doge, the department of budgetary efficiency, by Donald Trump is not for nothing in this rebound. Some investors have thus stressed that Elon Musk’s close ties with President Trump were an additional reason to be optimistic for X. Great advertisers like Disney and Apple have returned to the platform in recent months. While other brands, such as Amazon, increased their marketing expenses at X.
Tesla, Elon Musk’s electric car manufacturer, does not however benefit from the same benefits so far, with actions according to Forbes Again down almost 5 % on Monday, March 17, reaching $ 238 billion, a drop of more than 41 % since the start of the year.
Beyond advertising, X intensifies its efforts to diversify its sources of income and become what Elon Musk has nicknamed “the universal application”, reports the Financial Times. In addition, the company works in close collaboration with XAI to integrate its AI technology into the platform, and launched the latest version of its IA Grok 3 chatbot on Monday for premium subscribers. Thus, X plans to use AI technology developed by XAI to energize its advertising offer and products.
Still according to the Financial Timesthe company’s operating profits have returned to the levels observed before its acquisition. X is also working to raise new capital, around $ 2 billion, selling new stocks to reimburse more than $ 1 billion in debt.